Globalization Of The United States - 1377 Words

The United States is often defined as a â€Å"capitalist† economy, a concept created by a German economist and social theorist Karl Marx, to define a system in which a minor group of persons, who regulate large quantities of capital, create the most important economic decisions. Sometimes capitalism is known as a â€Å"global system of abuse† because at times capitalism is centered on violence and submission. Capitalism puts enormous pressure on society to make capital. In the United States have seen a lot of fraud through the years, as well as other high profile crimes in which the fraud formed part. The most feared crime by companies in developed countries is fraud, even compared to other crimes such as theft and sabotage. Far from being under†¦show more content†¦Ponzi fooled thousands of investors, he promised huge earnings on international reply coupons, which could be acquired in one country and used for postage stamps in another country. The income would be the difference in price between the two countries. He converted a millionaire in a few months, but the scam took him down. Some parties started to investigate the accounts because there weren t enough international coupons for his investment strategy to function. Actually, Ponzi was paying his investors with newer investors money, staying with a huge quantity. In a few months, Ponzi acquired $20 million, equivalent to $222 million in current dollar values, and six banks crumbled. On the other hand, Bernie Madoff, a respectable financier, used the famous Ponzi scheme, which attracts investors in by warranting high revenues. As mention before, Ponzi schemes consisted in using money from new investors to pay off the guaranteed returns to the older investors. This makes the investment look valid and profitable, even that was not generating any profit. In Madoff s case, things began to complicate after clients demanded a total of $7 billion back in returns. Unfortunately for Bernie, he did not have enough money to give back to his investors. According to CNNMoney, he only made $20 billion, even though he cheated investors out of $65 billion. According to the author George Robb in his article â€Å"Before Madoff and Ponzi: 19th-Century